Second charge
Second charge bridging
Written by Chris Canham, commercial finance broker with nearly 30 years in financial services. Last reviewed .
Raising capital behind an existing mortgage, without disturbing a rate you would not get again today.
What it is
A second charge exists to protect the first.
A second charge is a loan secured on a property that already has a mortgage, ranking behind the existing first charge. If the property is sold or the borrower defaults, the first-charge lender is repaid in full before the second-charge lender receives anything. That extra risk is why a second charge costs more than the equivalent first charge.
Most first-charge lenders require their consent before a second charge can be registered, usually through a deed of consent or postponement. Obtaining that consent is the most common cause of delay, so we raise it at the start rather than at the end.
The case for a second charge is arithmetic. If your existing loan is on a rate you would not get today, or carries an early repayment charge, refinancing the whole balance to raise a smaller sum can cost more than a short second-charge bridge on top. We work through both options with real numbers before recommending either. Second charges secured on your own home are regulated – we do not arrange those and will refer you to an authorised firm.
Use cases
When a second charge is the better route.
Protecting a legacy rate
A first-charge fix well below current pricing that would be lost on a full refinance.
Avoiding an early repayment charge
Where the ERC on the first charge would cost more than the second charge itself.
Deposit for the next purchase
Releasing equity quickly from an investment or commercial property to secure another acquisition.
Funding works on an owned asset
Raising a refurbishment budget without touching the existing term loan.
Short-term business cashflow
Bridging a working capital gap against property equity, with a defined and realistic exit.
Tax or partner buyout deadlines
Where a fixed date – a tax bill, a shareholder exit, a settlement – drives the requirement.
Indicative terms
What second charge lenders look for.
| Measure | Typical position |
|---|---|
| Monthly interest rate | Priced as bridging, with a premium for the second-charge position |
| Maximum combined LTV | Assessed on total borrowing across both charges |
| Term length | Short term, with a defined exit |
| First charge consent | Usually required – deed of consent or postponement |
| Minimum loan size | Lender-dependent |
| Time to completion | Driven mainly by the first-charge lender's consent |
Combined leverage across both charges is the number that decides the deal.
Go deeper
A variant of standard bridging.
Second-charge bridging follows the same conventions as standard bridging – monthly interest, arrangement and exit fees, and a defined exit – with a premium for sitting behind another lender. Read the full bridging guide for how the costs are built up, and use the bridging cost calculator to compare it with refinancing the whole balance.
Questions
The things people ask first.
Sitting on equity and a rate worth keeping?
Send the property value, the outstanding first-charge balance and the amount you need, and you will get an indicative view back.
We aim to respond the same working day.
Or book a 30-minute call at a time that suits you.